Compensating Condominium Directors

December 2022

It is not ‘illegal’ for condominium directors to be compensated.  Financial compensation is not a common practice although there are good reasons to consider this.

Paying any director, or owner, for services rendered to the corporation creates a potential conflict of interest requiring disclosure.  Directors should not be involved in discussions or votes that potentially impacts on their income.

Benefits to paying one or more qualified directors to serve as an administrator working alongside the condominium manager are compelling.  It offers a way to address many of the challenges of condominium management and condominium living that often get ignored.

Serving as an active condominium director is demanding, thankless and at times more time-consuming than a full-time job.  Individuals are volunteers who can lack business and management experience.  Skilled individuals may be reluctant to take on this responsibility because of the time commitment and abuse from owners.  This explains why many condo boards lack qualified individuals and fail to be effective.

Condominium managers are not stakeholders.  It is unreasonable to expect them to assume responsibilities inconsistent with their job description or which may negatively affect their compensation.

Condominium corporations may be better managed by employing a qualified stakeholder to work alongside their condominium manager.  They can commit more time to their position, accept more responsibility, provide expertise missing from the board, and undertake tasks inappropriate for the condominium manager to assume.

Financial compensation can improperly motivate individuals to serve as condominium directors.  Compensation in the form of reduced condominium fees is to be discouraged.  No owner should be paying less than their proportional share of corporation expenses as stated in the declaration.

Any compensation for corporation directors should be disclosed in financial statements.